Don’t Miss Out on Year-End Business Tax Savings
posted: December 16, 2011 by Andres Remis
The IRS Section 179 deduction may be able to save your business considerable money in taxes by allowing you to expense 100% of certain technology purchases made before December 31, 2011.
Section 179 works like this:
When your business buys certain items of equipment, it typically gets to write them off a little at a time through depreciation. In other words, if your company spends $50,000 on a machine, it gets to write off (say) $10,000 a year for five years (these numbers are only meant to give you an example).
Now, while it’s true that this is better than no write off at all, most business owners would really prefer to write off the entire equipment purchase price for the year they buy it.
In fact, if a business could write off the entire amount, they might add more equipment this year instead of waiting. That’s the whole purpose behind Section 179… to motivate the American economy (and your business) to move in a positive direction. For most small businesses (adding total equipment, software, and vehicles totaling less than $500,000 in 2011), the entire cost can be written-off on the 2011 tax return.
You can find more information on Section 179, including a tax savings calculator at section179.org.
Please review your situation and the current IRS Section 179 program with your licensed tax professional before making any decisions.